Your page one piece on Tuesday, “A Pulse
That Lingers,” advises your faithful readers that “Inflation, Believed in
Terminal Condition, Could Soon Emerge From Its Deep Sleep.” You might also
make that forecast about your own powers of neo-Keynesian prognostication,
although I am tempted to say that Alan Greenspan has driven a golden spike
through your heart. Since you broke off all communication with me several
years ago, Peter, on the grounds that I had to be wrong, and your PhD chums
had to be right, all of your precise mathematical calculations about the
non-accelerating inflation rate of unemployment have gone to trash.
Now you say Robert Gordon of Northwestern, “a specialist on inflation,” has
reduced his inflation trigger from 6% to 5.3%, even though we are at 5% and
there is no sign of inflation. When are you and the Times going to realize
that Robert Gordon of Northwestern knows nothing about inflation? When an
economist makes a bad call once, twice or three times, you can pass it off as
atmospherics, but Gordon and the other characters you have in your moth-eaten
neo-Keynesian rolodex have been floundering for as long as I can remember. Now
Gordon tells us wages are not rising because employers are cleverly giving
their workers promotions, which puts them into a different reporting category.
This guy is brain dead, Peter.

And Peter, for God’s sakes, do you
realize how ridiculous you seem in reporting with a straight face that Dale
Jorgenson of Harvard says he was wrong about inflation because he didn’t
realize today’s workers are older and more experienced than they were ten
years ago? Stop and think how feeble this argument is. Did you ask Jorgenson
if he had thought how feeble it is?

Then, Peter, think how stupid it sounds
to quote Rudi Dornbusch of MIT, one of the inflation dunces of this
generation, saying that we don’t have inflation because labor unions aren’t as
strong as they used to be. Unions cause inflation? Karl Marx would have had
Dornbusch shot. George Meany would have put him in solitary. I recommend Rudi
take lots of sleeping pills and wake up when your sleeping inflation
does.

Oh, yes, then we have William Dudley,
chief U.S. economist of Goldman, Sachs & Co. “We’ve been very lucky,” you
quote him as saying. Does he mean that Goldman, Sachs is lucky to have Abby
Cohen, who knows what’s going on? Just what does Dudley mean, lucky?

Then you give us Paul Krugman of MIT, who
may be the worst economist of the 1990s, replacing Lester Thurow, the worst of
the 1980s. Krugman tells you, and you dutifully report, that it is fear and
intimidation that has brought inflation to its knees. Workers are scared to
death of losing their jobs, so they don’t ask for more money, which would be
inflationary, he says. Now if Karl Marx wants to shoot Krugman, I would second
the motion, but only if Kevorkian were on hand to make sure he goes without
pain. This is vintage Krugman you quote: “Being nice to the rich hasn’t
made much difference to the American economy, but being beastly to the poor
does seem to increase efficiency.” To keep inflation really low, Peter,
get the whip and scourge anyone who looks like they might be earning less than
$20 K. Lash out at widows and orphans and you might drive the CPI into
negative territory.

You conclude with the famous Barry
Bosworth of the Brookings Institution, who has made a career out of the
Phillips Curve and its “so-called non-accelerating rate of
unemployment.” You wisely counsel that the only way to know for certain
whether unemployment could be driven down further without igniting prices is
to try, but Bosworth warns: “At this point, the risks are on the downside,”
says Bosworth.

Well, yes, Peter. How scientific! But
Bosworth doesn’t tell us how he would try to get unemployment down even
further without risking inflation. What would he do? Do you think he might
recommend a cut in the capital gains tax, even though Krugman will point out
that would be a beastly thing to do to the poor? What would you do,
Peter?

I recommend you get a tape of Greenspan’s
testimony today before House Banking and play it over a few times, paying
special attention to his commentary on gold. I say this not having seen the
testimony, Peter, but I know our esteemed Fed Chairman, who is a genuine
“expert on inflation,” had something smart to say.

You better get smart too, Dr. Passell.
One of these days the top brass at the Times will take note that you have been
off the rails for quite some time. Your executive editor, Joe Lelyveld, may
wake up one of these days and decide you would make a better writer of
obituaries, of all those dead economists in your rolodex. I’d hate to see that
happen, for old times’ sake.

I know some readers of this memo on my
website will think I’ve being too harsh in my criticism of your effort, that I
would get further if I were nice. But you would be the first to agree, Peter,
that I’ve tried being nice and it gets me nowhere with
you.